Eric Alston


In the context of private ordering—where rule sets are relatively fluid, centrally controlled, and exist in the shadow of law and regulation—developing generalizable insights about comparatively superior governance mechanisms is difficult. I shed light on this question by characterizing cryptocurrency blockchains as a type of constitutional rule set that both defines and legitimizes the activities supported by the underlying distributed ledger technology. More specifically, I argue that cryptocurrency blockchains have led to new forms of competition in private governance, which include exit costs and citizenship rules as important competitive margins. My analysis not only identifies the choices in constitutional governance to which proposed cryptocurrency blockchain changes are analogous, but it also highlights the competitive gains expected to result from these changes. I further consider both the trade-offs in governance created by competition between cryptocurrency blockchains and the surprising ways in which these unique competitive margins may influence downstream outcomes.